#ValueWaliDiwali: Here’s To a New Way of Buying Gold

Posted On Friday, Oct 29, 2021

Buying Gold during Diwali has been part of our culture for generations in India. Gold has been considered as a symbol of prosperity, probably because we have understood its potential for upholding long-term value. During this Diwali, buying Gold does not have to be an expensive affair. It’s time to merge the old tradition with the new way of buying Gold; invest in low cost and innovative ways: Gold ETFs or SIP in Gold Fund of Funds.

New Normal, Old Advice

So far in this crisis, Gold has played an important role as a source of liquidity. For those who held gold to diversify their portfolios, it limited the downside risk that we all saw during the Covid-19 triggered equity markets crash in Mar 2020.

It’s never too late. The negative correlation that occurs generally between Equity and Gold & regular rebalancing of your portfolio can minimize the impact of losses driven by falling markets.

Illustration 1: Traditional vs New Way of Investing in Gold


Price Efficiency

For illustrative purposes, let’s consider gold prices are at Rs 45,000 per 10-gram. If you were to add making charges at 10% and GST and also the maintenance charges in term of locker charges, this would invariably increase the cost of buying gold.

Illustration 2: Gold Pricing Markups

ComponentsGold Rate (24K) Rs.
24 K Plain Gold45,000
Making Charges @ 10%4500
Sub Total49,500
GST @ 3%1485
Grand Total50,985

For illustrative purposes only.

On the other hand, if you were to invest in a Gold ETF, you would have to pay less than 1% as annual expense ratio. Moreover, it would translate to better price efficiency due to the following reasons:

✔ Gold ETFs transfer benefit of wholesale purchase prices to investors

✔ Benefit of GST credit at the time of selling gold, at the scheme level

✔ Traded close to the market price of physical gold, with a thin difference between buying and selling price

5 Reasons to Invest the New Way

There are several advantages of investing in Gold through Quantum Gold Savings Fund or Quantum Gold Fund ETFs.

Invest in small denominations

Purity at 99.5% finesse

Invest easy 24X7 online, can be easily liquidated

All gold bars tested independently

Safely stored in professional accredited vaults

Use the Correction to build your Allocation

From the highs of Rs 57,000 per 10 gramme in August last year, the price of Gold has come down Rs. ₹46110 as of Sept 2021. The correction should not be mistaken for a drop in the long-term potential of Gold. It gives you great buying opportunity to begin allocation or increase your exposure to gold.

In spite of correction, Gold continues to be a preferred asset.

What we need to remember is that all asset classes don't move at the same pace or in the same direction. The way to balance risk and reward in an investment portfolio is to diversify one’s assets. Hence, it becomes important to have an asset allocation strategy by diversifying across asset classes such as equities, debt and gold to generate risk adjusted returns. This is why we have come up our proprietary 12-20-80 asset allocation strategy.

After setting aside money equivalent to 12 months of expenses’ in an emergency corpus with the Quantum Liquid Fund, investors can consider investing 20% of their portfolio to the risk reducing and portfolio diversifying asset of Gold with Quantum Gold Savings Fund or Quantum Gold ETF.

Whereas the balance 80% can be invested in a diversified equity bucket comprising of Quantum Long Term Equity Value Fund, Quantum Equity Fund of Funds and Quantum India ESG Equity Fund.

Asset Allocation

Please note that the above suggested fund allocation only and is not to be considered as investment advice / recommendation, please seek independent professional advice and arrive at an informed investment decision before making any investments.


This festive season, use the correction to build your gold allocation the new way with the Quantum Gold Savings Fund or Quantum Gold ETFs.

Related Articles
What the Ban on Digital Gold Means for Gold ETF investors?
Gold is down but waiting to rise and shine


Watch our latest Mega webinar video on Asset Outlook & the Economic View in the Current Market Scenario where Chirag Mehta, Senior Fund Manager, Alternative Investments, give you further insights into how to invest in Gold.




Product Labeling
Name of the Scheme & Primary BenchmarkThis product is suitable for investors who are seeking*Risk-o-meter of Scheme
Quantum Liquid Fund

An Open Ended Liquid Scheme
• Income over the short term

• Investments in debt / money market instruments.
Quantum Liquid Fund
Investors understand that their principal will be at Low Risk
Quantum Gold Fund

An Open Ended Scheme Replicating / Tracking Gold
• Long term returns

• Investments in physical gold.
Quantum Gold Fund
Investors understand that their principal will be at Moderately High Risk
Quantum Gold Savings Fund

An Open Ended Fund of Fund Scheme Investing in Quantum Gold Fund
• Long term returns

• Investments in units of Quantum Gold Fund - Exchange Traded Fund whose underlying investments are in physical gold.
Quantum Gold Savings Fund
Investors understand that their principal will be at Moderately High Risk
Quantum Equity Fund of Funds

An Open Ended Fund of Funds scheme Investing in Open Ended Diversified Equity Schemes of Mutual Funds
• Long term capital appreciation

• Investments in portfolio of open-ended diversified equity schemes of mutual funds registered with SEBI whose underlying investments are in equity and equity related securities of diversified companies
Quantum Equity Fund of Funds
Investors understand that their principal will be at Very High Risk
Quantum India ESG Equity Fund

An Open ended equity scheme investing in companies following Environment, Social and Governance (ESG) theme
• Long term capital appreciation

• Invests in shares of companies that meet Quantum's Environment, Social, Governance (ESG) criteria.
Quantum India ESG Equity Fund
Investors understand that their principal will be at Very High Risk
Quantum Long Term Equity Value Fund

An Open Ended Equity Scheme following a Value Investment Strategy
• Long term capital appreciation

• Invests primarily in equity and equity related securities of companies in S&P BSE 200 index.
Quantum Long Term Equity Value Fund
Investors understand that their principal will be at Moderate Risk
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
The Risk Level of the Scheme in the Risk O Meter is based on the portfolio of the scheme as on Sep 30, 2021.

Disclaimer, Statutory Details & Risk Factors:

The views expressed here in this article / video are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. Quantum AMC / Quantum Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The article has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of this article should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments.

Mutual fund investments are subject to market risks read all scheme related documents carefully.

Please visit – www.QuantumAMC.com to read scheme specific risk factors. Investors in the Scheme(s) are not being offered a guaranteed or assured rate of return and there can be no assurance that the schemes objective will be achieved and the NAV of the scheme(s) may go up and down depending upon the factors and forces affecting securities market. Investment in mutual fund units involves investment risk such as trading volumes, settlement risk, liquidity risk, default risk including possible loss of capital. Past performance of the sponsor / AMC / Mutual Fund does not indicate the future performance of the Scheme(s). Statutory Details: Quantum Mutual Fund (the Fund) has been constituted as a Trust under the Indian Trusts Act, 1882. Sponsor: Quantum Advisors Private Limited. (liability of Sponsor limited to Rs. 1,00,000/-) Trustee: Quantum Trustee Company Private Limited. Investment Manager: Quantum Asset Management Company Private Limited. The Sponsor, Trustee and Investment Manager are incorporated under the Companies Act, 1956.

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